ConAgra Foods has sealed a deal to buy private-label foods maker Ralcorp Holdings for $5 billion to tap into the booming business for packaged food that stores sell under their own brand. ConAgra began its pursuit of Ralcorp in March 2011.

Demand for cheaper private-label foods has outpaced growth in branded packaged foods in recent years.

“Clearly consumer dynamics have changed since the recession, and we expect growth in private-label food to continue to outpace growth in branded food,” said ConAgra chief executive Gary Rodkin.

Ralcorp is the top private label maker of large and growing products such as cereal, pasta, crackers, jams and jellies.

Ralcorp shareholders will get $90 per share in cash, a premium of 28.2 per cent to Monday close. – Reuters